If a pure monopolist is producing at that output where P = ATC, then
A) its economic profits will be zero.
B) it will be realizing losses.
C) it will be producing less than the profit-maximizing level of output.
D) it will be realizing an economic profit.

Question

Quizplus · Accepted Answer

When a monopolist is producing at the output level where P = ATC, it is producing at the minimum point on its average total cost curve. At this output level, the monopolist is neither earning economic profits nor incurring losses, but is earning a normal profit. In other words, it is earning enough revenue to cover all of its costs, including a normal rate of return on capital.

If a Pure Monopolist Is Producing at That Output Where